The Democratic-Corporate Industrial Complex
In the midst of the current Wall Street controversy, one very powerful Democrat has remained silent if not totally invisible. His name is Barnett Frank, better known as “Barney”. Since 1981 , the Democrat has represented the South Boston area in Congress. He is often called ” A Giant Among Congress” because of his very powerful activist role as Chairman of the House Financial Service Committee. In 2003, Republicans in the Bush administration and Congress wanted to create a new agency that would regulate Fannie Mae and Freddie Mac because they were concerned about a problems developing in the industry. This measure was blocked by Chairman Franks who said “”These two entities, Fannie Mae and Freddie Mac, are not facing any kind of financial crisis,” Frank said. He added, “The more people exaggerate these problems, the more pressure there is on these companies, the less we will see in terms of affordable housing.” What Mr. Franks was referring to was a Democratic plan that went back to the Clinton administration.
President Clinton in the 1990’s made affordable housing one of his key programs. He complained that too many minority and poor neighborhoods were “red-lined” from getting loans. Prior to these actions, home loans, were mostly done by local banks and required strict adherence to long standing rules of down payment and proof of income. His administration felt that such policies where discriminatory and he pushed for the development of other agencies other than traditional banks to be to loan money to “poor risks”. This was the beginning of the Democratic partnership with Wall Street that ultimately led to Barack Obama receiving the most contributions in history from Wall Street of any candidate.
Another conspicuously silent Democrat is the current governor of New Jersey, Jon Corzine. He was a senior partner in the Wall Street firm, Goldman-Sachs, when he was named as an adviser to the Clinton administration for burrowing policies for the U.S. Treasury. It was Corzine’s influence that convinced President Clinton that the Federal government should bailout a Wall Street firm, Long Term Capitol Management. The current Secretary of the Treasury, Henry Paulson, at that time also a Goldman-Sachs questioned Corzine’s judgment which ultimately led to his being forced from the firm.
Corzine was elected to Senate where he was seen to continue to be a advocate for government bailout of Wall Street. He was involved with other Democrats in calling for the ouster of Henry Pitt, the Securities and Exchange Commission chairman. Mr. Pitt was an advocate of very stringent regulation for financial services and Wall Street which greatly disturbed many Wall Street executives. However, his position on protecting accounting agencies in the wake of the Enron scandal did weaken his overall standing as a reformist. Now the governor of New Jersey he has remained one of Barack Obama’s most fervent supporters and close advisers.
In 2005, H.R. 1461, better known as the Federal Housing Finance Reform Act of 2005 was passed by the House of Representatives but not the Democratically controlled Senate. The bill proposed stricter regulation of Fannie Mae and Freddie Mac. The bill was blocked from coming to a vote by Democrats and some Republicans all of whom had received heavy donations from Freddie Mae, Fannie Mac, and Wall Street. The bill was supported by John McCain.
Many Americans today mistakenly think that American corporations and Wall Street are Republican proponents. The reality is that beginning with Clinton years, corporate interests have increasing been contributing more to the Democratic party than the Republican party. Corporate executives feel that the positive publicity of funding “social changes” while gaining access and influence to Democratic office holders has been definitely worthwhile. If a corporate executive can increase his personal wealth by funding a Democratic cause then its all the better. Barack Obama likes to describe his economic plan as similar to a”New Deal”. He may not realize how true that premise is in fact. Historians forget that when the United States entered the conflict in World War II , the two much smaller countries we opposed had stronger economies, better technology, and more powerful armed forces. Roosevelt’s New Deal did give employment to thousands but it crushed American ingenuity and enterprise severely. Favoritism was shown to certain corporate executives which resulted in monopoly and suppression of competition.
President Eisenhower warned of the dangers of government and business being too closely related in his famous use of the term “military-industrial complex”. Today corporate executives enjoy a copious amount of access, influence, and privilege with government. Barack Obama has dispensed with lobbyists and allowed them direct access and some might argue even control of his agenda. Similarly the Republican party is not immune. However, I suspect corporations have not contributed much to John McCain because he has often proved himself to often respond unpredictably on his own accord. If the Republican party is to survive, it must clearly establish itself as the true “populist” party which is separate from the special interests and expose them.The Democratic-Corporate Complex is a danger to our future. False promises of “free housing” as a tool to get votes without regard to its consequences has nearly collapsed our nation. In the end it only made the poor even poorer and represents treason against real social advancement of the less accomplished in our country.